India’s Unified Payments Interface (UPI) continues to demonstrate remarkable growth, but its rapid ascent is increasingly crowding out alternative payment methods, according to recent data from the National Payments Corporation of India (NPCI). While UPI transactions have surged dramatically, other retail payment systems such as IMPS, RuPay cards, and certain digital wallets are witnessing a slowdown in usage, signaling a shift in consumer preference toward UPI’s convenience and seamless experience.
Key Highlights
- Rapid UPI growth is slowing transaction volumes across NPCI’s other retail payment platforms.
- IMPS and RuPay struggle to match UPI’s scale as consumers consolidate digital payment habits.
UPI’s dominance has become especially pronounced in peer-to-peer and small merchant payments, where its real-time settlement and interoperability across banks and apps have made it the preferred choice for millions of users. This has led to a situation where competing payment options are struggling to maintain transaction volumes, with some traditional methods experiencing a notable decline.
Industry analysts suggest that the widening gap between UPI and other retail payment instruments reflects broader changes in the way Indians transact. With UPI available on a range of platforms and devices and with minimal friction, users are increasingly consolidating their payment behaviour around it — often at the expense of older systems. This trend is also encouraging fintech innovations, as startups tailor products specifically to integrate with or add value around the UPI ecosystem.
Also Read: UPI Transactions Rise Sharply in November 2025, Showing Strong Growth
However, the overwhelming popularity of UPI raises questions about the future role of other payment methods and the competitive landscape. Concerned stakeholders argue that a lack of diversity in payment options could eventually limit innovation, citing the need for alternative rails to coexist and evolve in tandem with UPI.
Overall, while UPI’s surge highlights India’s rapid adoption of digital payments, it also underscores the challenges facing other payment modes in retaining relevance amid changing consumer preferences and technological shifts.
